Key Benefits:
The Energy Control Board,
In view of the dispute settlement application, registered on 23 January 2006 under number 06-38-01 and regulated on 27 January 2006, by Altergaz, anonymous company, registered in the register of trade and companies of Nanterre under number 451 225 692, whose head office is located 24 Jacques-Ibert Street, 92300 Levallois-Perret, taken in the person of his legal representative, Mr. Robert Delbos.
Altergaz seized the Energy Control Board of the dispute opposing it to Gaz de France, operating natural gas storage facilities, on the conditions of access to storage.
Altergaz maintains that the reservation system established by Gaz de France, which requires the allocation of natural gas storage capabilities to the prior conclusion of supply contracts, is incompatible with the daily commitments it has made to its suppliers to fulfill its public service obligations.
Altergaz is of the opinion that this system is discriminatory, since it allows the Gaz de France supplier to reserve a priority of injecting its own gas resources, on the favourable conditions of the summer months, while ensuring the resale of the quantities corresponding to the needs of new entrants, during the winter, in the worst conditions of negotiation for them. It adds that the notice conditions imposed by Gaz de France constitute a barrier to entry for suppliers seeking to earn market shares, which cannot justify the acquisition of new customers, while they must reserve storage capacities to meet their needs forecasts.
Altergaz argues that the call for tenders organized by Gaz de France in February 2006 for the allocation of additional gas storage capabilities cannot be a suitable solution, as long as it is likely to result in a significantly higher cost than that of published tariffs, due to the international context. It considers that such a solution does not address the problem of a commercial operator who has to rely on storage for the supply of its distribution customers, acting on a market dominated by very low seasonally administered tariffs.
Altergaz asks the Energy Control Board to recognize the Commission's ability to subscribe, on the basis of the tariffs and conditions published by Gaz de France for access to storage, to the capacity it will be necessary to carry out its gas purchase and sale activities, as of April 1, 2006, possibly associated with terms and conditions of disposal of the gas overabundantly stored in case of objectives not achieved on the basis of transparent and transparent conditions.
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In view of the defence observations, recorded on 14 February 2006, by Gaz de France, operator of natural gas storage facilities, anonymous company, registered in the register of trade and companies of Paris under number 542 107 651, whose head office is located 23, rue Philibert-Delorme, 75017 Paris, taken in the person of its director of major infrastructure, Mr. Jean-Marc Leroy.
Gaz de France submits that it is the result of the combined provisions of sections 30-1, 30-2 and 30-4 of the Act of 3 January 2003 that access to gas storage is subject to the existence of customers whose food must be provided in accordance with the conditions provided for by their contracts. It deduces that it is appropriate to reason for the actual customers of suppliers and not foreseeable data, the customer quality can only be recognized to those who have already entered into a contract.
Gaz de France emphasizes that, pursuant to the combined provisions of Articles 3, 4 and 5 of the Decree of March 19, 2004 on public service obligations in the gas sector, the use of storage is only justified to ensure the continuity of supply of effective customers who have entered into a contract with a supplier. It notes that the rules for the allocation of storage capacity must therefore be determined by reference to actual contracts.
Gaz de France believes that this system is consistent, since it requires suppliers to ensure the availability of alternative sources, including storage capabilities, only because of their contractual obligations, and not beyond, which would be disproportionate. He adds that these rules guarantee the allocation of storage capabilities as the supplier's portfolio changes.
Gaz de France recalls that, pursuant to Article 7 of the Decree of 19 March 2004 on the authorization of supply of gas, the authorization becomes null and void in full law, when the licensee is unable to report any current contract with customers for a period of one year. It concludes that the right of access to natural gas storage must be assessed against the same criterion, for failing which a supplier would be able to reserve capacities on the basis of simple forecasts, even though its supply authorization would be subject to caducity.
Gaz de France notes that a contrary interpretation would not ensure continuity of service and ensure allocation of storage capacities, on the basis of objective criteria, in transparent and non-discriminatory conditions, in accordance with the principles laid down in article 30-3 of the law of 3 January 2003. He argues that if storage capacities could be reserved on the basis of simple forecasts, he would be compelled to refuse access to suppliers that warrant effective customer service due to a lack of capacity, within the meaning of section 30-4 of the Act.
Gaz de France considers that its position is in accordance with the published law and rules of allocation and does not prejudice the interests of Altergaz. It notes that the capacity to which this company is entitled will be allocated as the expansion of its customer portfolio, as it has entered into its letter of January 11, 2006, pursuant to the provisions of section 30-2 that guarantee the automatic allocation of the storages released by the previous supplier.
Gaz de France considers that Altergaz is unable to avail itself usefully of its commitments under "take or pay" contracts, provided that no provision governing the supply activity requires a supplier to enter into such contracts and ensure the availability of alternative sources, including gas storage, for their execution. He points out that these commitments were freely taken by Altergaz and knowingly, since the rules for the allocation of storage have been regularly published on his website since December 2004.
Gaz de France submits that the conditions for the redemption of gas in stock from the previous supplier are outside this dispute, which concerns the criteria for the allocation of storage capacity, and are not likely to be examined by the Energy Control Board.
Gaz de France notes that the allocation of additional storage capacity, as part of the auction procedure launched in January 2006, has allowed Altergaz to have additional capacity, which suggests that it has found reasonable price conditions.
Gaz de France, therefore, asks the Commission for the regulation of energy to reject the demand of Altergaz.
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In view of the reply comments, recorded on 22 February 2006, submitted by Altergaz.
Altergaz submits that in the absence of the decree in the Council of State specifying the conditions and conditions for the application of the right of third parties to the storage, the restrictive interpretation adopted by Gaz de France of the provisions of Article 30 of the law of 3 January 2003 cannot be validated.
Altergaz noted that the draft decree in the course of development provides for the allocation to new storage capacity providers exceeding the quantum of their rights acquired for the supply of their customers, subject to the return of surplus capacities in case of need.
Altergaz considers that it is in the very text of the law of 3 January 2003 and in the general principles of competition law that it is necessary to seek the basis for a fair settlement of the dispute that opposes it to Gaz de France.
Altergaz maintains that the obligation of suppliers by the law of January 3, 2003 to hold the gas stocks required to supply their customers on October 31 of each year will take the right to inject the corresponding gas during the previous summer.
Altergaz observes that the interpretation of the law made by Gaz de France deprives it of the possibility of acquiring new customers, compromising the economic balance of its supplies. She adds that such an interpretation would lead her to buy back to Gaz de France on 31 October, under undetermined conditions, the quantities of gas in stock corresponding to the rights of customers who signed contracts on 28 February.
Altergaz argues that the position adopted by Gaz de France regarding the rules of access to storage capacity is similar to an abuse of dominant position, whose effects are felt on the market activity, subject to competition. It is of the view that the lack of separation of Gaz de France's storage and trading activities is prejudicial to equitable implementation of third-party access to storage, in the conditions of transparency and independence expected by suppliers.
Altergaz stresses that the price conditions it was obliged to enclose, as part of Gaz de France's call for tenders, forced it to limit its capacity reservations. It notes that the entity of Gaz de France specialized in the trade was authorized to participate in this call for tenders and that it was able to profit, on an accounting basis, from the increase in the cost of storage resulting from it.
Altergaz therefore persists in its previous conclusions.
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In view of the additional comments, recorded on 1 March 2006, submitted by Gaz de France.
Gaz de France submits that the draft decree to which Altergaz refers does not produce any legal effect, provided that it has not been adopted, and therefore it is necessary to apply directly the provisions of the law of 3 January 2003 to resolve the dispute.
Gaz de France believes that the fact that the draft decree grants suppliers the ability to reserve additional storage capacities demonstrates that they are entitled, in advance, to rights assigned to their effective customers.
Gaz de France points out that it is with respect to effective customers that it is appropriate to assess the obligation for each supplier to ensure continuity of supply, in accordance with the provisions of Article 3 of the Decree of 19 March 2004 on public service obligations in the gas sector. It states that section 30-2 of the Act of 3 January 2003 does not establish an injection right. He adds that the injection phase has no other purpose than allowing the supplier to have the necessary stocks to meet its contractual obligations in the following winter.
Gaz de France recalls that, in accordance with the combined provisions of Article 30-2 of the Law of 3 January 2003 and Article 5 of the Decree of 19 March 2004 on public service obligations in the gas sector, the use of storage is, among others, a means of ensuring continuity of supply to customers. As such, it observes that each supplier may be delivered from the gas modulated by an upstream supplier to the transport-distribution interface point, without having to use storage, in accordance with the terms and conditions in the GTG (gas working group).
Gaz de France submits that the customer of the storage facilities can, if it has capacity sufficiently early in the year, inject gas itself, or, if not, make gas purchases in stock from other suppliers. He adds that a procedure has been put in place for this purpose.
Gaz de France considers that it is logical that the supply authorization take into account forecasting data for new entrants, but recalls that it becomes obsolete when its licensee is no longer able to report on any contract in progress for a year.
Gaz de France notes that, contrary to what it supports, Altergaz is not required to buy back gas stocks, but has the free choice of the supplier.
Gaz de France indicates that a contract for access to storage is being finalized with Altergaz, based on its effective customer base, regardless of the agreements reached following the auction procedure.
Gaz de France recalls that the Energy Regulatory Commission is not competent to decide on compliance with competition rules.
Gaz de France submits that the relationship between the management of large infrastructure, which manages storage facilities, and management negotiates, in charge of supply activities, is consistent with the accounting separation principle laid down in Directive 2003/55/EC of 26 June 2003. It states that these relationships are organized by protocols, in accordance with the provisions of section 30-3 of the Act of 3 January 2003, and that it has established a separation of functions between these two entities without waiting for the entry into force of the guidelines for good practices for storage system operators (regulations for good practice of third party access to storage).
Gaz de France adds that the technique of auctions rising to several laps, as well as the particular modalities used for their implementation, made it impossible to determine the price by either of the first two bidders.
Gaz de France persists in its previous conclusions.
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Considering the other parts of the file;
Considering the amended Act No. 2000-108 of 10 February 2000 on the modernization and development of the public electricity service;
Having regard to amended Decree No. 2000-894 of 11 September 2000 on the procedures applicable to the Energy Regulation Commission;
Considering the decision of 15 February 2001 on the rules of procedure of the Energy Control Board;
Having regard to the decision of 27 January 2006 of the Chairman of the Energy Control Board on the appointment of a rapporteur and a deputy rapporteur for the instruction of a dispute resolution request;
Considering Directive 2003/55/EC of the European Parliament and the Council of 26 June 2003 on common rules for the domestic natural gas market and repealing Directive 98/30/EC;
In light of Act No. 2003-8 of 3 January 2003, on gas and electricity markets and the public energy service;
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The parties were regularly convened at the public session of the Energy Control Board, held on March 8, 2006, in the presence of:
Mr. Jean Syrota, President, Ms. Jacqueline Benassayag and Mr. MM. Eric Dyevre, Bruno Lechevin and Pascal Lorot, commissioners;
M. Olivier Challan Belval, directeur général, M. Christian Bossoutrot, chef du département accès aux réseaus et marchés de la direction juridique ;
M. Pierre Dreyer, rapporteur, et M. Laurent Schwebel, rapporteur adjoint ;
Me François-Pierre Lani, MM Robert Delbos and Pierre Flahaut, for Altergaz;
Me Sandrine Perrotet, MM. Jean-Marc Leroy and Jean-Michel Cabanes, for Gaz de France;
After hearing:
- the report of Mr. Pierre Dreyer, presenting the means and conclusions of the parties;
- the comments of François-Pierre Lani, MM. Robert Delbos and Pierre Flahaut, for Altergaz Company: Altergaz Company emphasizes that, in the spirit of the law transposing Directive 2003/55/EC of 26 June 2003, gas storage is essential infrastructure, which justifies the existence of a right of access for the benefit of any supplier; the Commission notes that any gas supplier is obliged to work on the basis of forecasts, whether in relation to the administration, for the issuance of the supply authorization, or its commercial partners, for the development of the offers; Altergaz asks that the sale price of the stored gas be set by transparent and fair rules;
- MM's observations. Jean-Marc Leroy and Jean-Michel Cabanes, for Gaz de France: Gaz de France confirms the signing on 28 February 2006 of a contract for access to storage with Altergaz, to meet the needs of its actual customers; it insists on the risk of discrimination that would result from the allocation of storage capacity on the basis of customer forecasts, which are unclear and unverifiable; Gaz de France states that the allocation of capabilities as their needs does not affect the price paid by suppliers; it ensures that the same allocation rules are applied to all suppliers, including the historical supplier, but recalls that customer data and associated capabilities are commercially sensitive information and cannot be published; Gaz de France states that it has made public a model of contract for access to storages with clauses relating to the assignment of capacities between suppliers and the rules of use of stocks;
The Energy Regulation Commission, having deliberated on 8 March 2006, after the parties, the rapporteur, the deputy rapporteur, the public and the service officers withdrew.
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The facts:
During a meeting held on November 21, 2005, Altergaz asked Gaz de France to allocate storage capacity to meet its modeling needs forecast for the winter of 2006-07. Gaz de France replied that this request could only be honoured to meet its storage needs for customers who have actually signed a supply contract on April 1, 2006, and not based on its sales forecasts in the following winter.
A period of one month is required to sign a contract for access to storage, and the gas injection period starts on April 1 of each year. Under these conditions, if Altergaz acquires new customers after February 28, it will only have the storage capacity to ensure the continuity of its supplies after the start of the injection period. As a result, Altergaz maintains that it will not be able to dispose of sufficient gas stocks to meet its public service obligations, without redeeming gas stored by other suppliers, on conditions that it cannot provide. This constraint will be even stronger at the end of the injection period.
In addition, Altergaz's procurement contracts, a "take or pay" type, which take into account its customer forecasts, involve a start of injections in storage on April 1. Any delay would compel Altergaz to reduce its gas removals and would therefore be penalizing.
Altergaz once again made its request for access to storage, in writing, in a letter dated 1 December 2005. By a letter dated 11 January 2006, Gaz de France confirmed its position.
In the face of this repeated refusal, Altergaz seized the Energy Regulatory Commission on 23 January 2006 with a request to settle the dispute that opposes it to Gaz de France on the conditions of access to storage.
On the competence of the Energy Control Board:
According to the provisions of Article 38 of the Act of 10 February 2000, "in the event of a dispute [...] between the operators and users of natural gas storage facilities [...] linked to access to said [e]s [...] facilities or their use, [...] the Energy Control Board may be seized by either party. [...] Its decision [...] is motivated and precise the technical and financial conditions for the settlement of the dispute in which access to [...] facilities ... or their use are, if any, insured. Where this is necessary for the settlement of the dispute, the Commission may, in an objective, transparent, non-discriminatory and proportionate manner, determine the terms and conditions of access to the said[e]s [...] facilities or conditions of use".
It is the result of the above-mentioned provisions that the Energy Control Board is competent to resolve, in their technical and financial aspects, disputes relating to access to or use of natural gas storage facilities. It may, where applicable, set the terms and conditions for access to such facilities or their terms and conditions of use.
However, it is consistent that capacity-building cannot be carried out without the concomitant allocation of the amount of gas that, given the technical constraints related to the respiration of storage, are necessarily present there, except at the beginning of the injection period. Thus, the Energy Control Board cannot effectively resolve a dispute regarding access to storage facilities or their use without deciding on the capacity filling rate and the terms and conditions for transfer of the corresponding gas.
Therefore, the competence of the Energy Control Board must be understood as extending to disputes relating to the transfer of stored gas, which constitute a condition for the use of storage facilities, within the meaning of the above-mentioned provisions of Article 38 of the Act of 10 February 2000.
It is therefore wrong that Gaz de France argues that the terms of redemption of the stored gas would not fall within the competence of the Energy Regulatory Commission, within the framework of this dispute resolution.
On the conclusions of Altergaz that the Energy Control Commission should recognize the ability of the Commission to subscribe, as of April 1, 2006, all the storage capacity it needs to achieve its customer objectives:
On the extent of the right of access to storage:
Altergaz maintains that it has the right to subscribe to all the capabilities it needs to carry out, as of April 1, 2006, its gas purchase and sale activities.
In accordance with the provisions of the third paragraph of section 30-1 of the Act of 3 January 2003, introduced by the III of section 38 of the Act of 9 August 2004, natural gas stocks ensure "the direct or indirect satisfaction of the needs of domestic customers and those of other customers who have not contractually accepted a switchable supply or ensuring missions of general interest".
Pursuant to section 30-2 of the Act of 3 January 2003, introduced by section 39 of the Act of 9 August 2004:
"I. - Any supplier holds in France, on the date of October 31 of each year, directly or indirectly through an agent, sufficient natural gas stocks, taking into account its other modulation instruments, to fulfil during the period between November 1 and March 31 its contractual obligations of direct or indirect supply of customers mentioned in the third paragraph of Article 30-1 [...].
II. - The access of suppliers, their agents and, through their suppliers, eligible customers to underground storage of natural gas is guaranteed to the extent that the provision of effective access to the network for procurement purposes requires it for technical or economic reasons.
As of the date of publication of Act No. 2004-803 of 9 August 2004 on the Public Service of Electricity and Gas and Electrical and Gas Enterprises, any supplier or agent who has access to a storage capacity and certifying to supply directly or indirectly a customer referred to in the third paragraph of section 30-1 of this Act shall release to the benefit of the new supplier of that customer a storage capacity that is required to meet the first paragraph
These provisions apply to existing contracts [...].
III. - A decree in the Council of State sets out the conditions and conditions for the application of this article".
The purpose of these provisions is to transpose Directive 2003/55/EC of 26 June 2003, which guarantees a right of third party access to gas storage facilities, and which considers it to be a "essential means, among other things, to implement public service obligations such as supply security."
As a result of the above-mentioned provisions, gas suppliers have the right to access underground storage of natural gas to ensure the continuity of their customers' supply. To this end, any supplier who ceases to feed a customer must release, for the benefit of the new supplier of this customer, the corresponding storage capacity.
The provision, guaranteed to the supplier by law, of the storage capacity required for the supply of a new customer is subject, under the law, to the preliminary conclusion of a supply contract.
Under these conditions, Altergaz cannot claim, on the basis of simple customer forecasts, to subscribe to the storage capacity it will need to carry out its gas purchase and sale activities as of April 1, 2006.
The absence of a publication of the decree in the Council of State provided for in Article 30-2 of the Law of 3 January 2003 cannot hinder the full implementation of the aforementioned provisions, which are sufficiently clear and precise. The provisions of the current decree, which has not been published to date and is only in the draft state, are not enforceable in the context of this dispute resolution request.
The circumstance that Altergaz would have subscribed to its suppliers of daily commitments incompatible with the rules of allocation of storage capacities established by Gaz de France cannot hinder the application of the provisions of article 30-2 of the law of 3 January 2003 referred to above.
The rules for the allocation of storage capacities set out by Gaz de France in its observations are consistent with the law, and Altergaz does not demonstrate that they constitute a barrier to entry into the gas market.
In addition, Altergaz does not support its claims that the allocation rules set by Gaz de France would not be applied in the same conditions to all suppliers.
The fact that the call for tenders organized by Gaz de France in February 2006 is not an appropriate response to the needs expressed by Altergaz, given its positioning on the gas retail market, is without impact on the application of the rules of access to storage set by law.
If Altergaz is of the opinion that the behaviour of Gaz de France is an abuse of dominant position, it is up to it to refer to the Conseil de la concurrence, the Commission for the Regulation of Energy cannot decide, when it is seized on the basis of Article 38 of the amended Act of 10 February 2000, on the anti-competitiveness of a practice.
As a result, Altergaz's request that the Energy Control Board recognize the ability to subscribe, as of April 1, 2006, all the storage capacity it needs to achieve its customer objectives can only be rejected.
On the conditions for the exercise of the right of access to storage:
Altergaz, in particular, motivates its claim for settlement of disputes by the fact that the rules set by Gaz de France would, in the light of the terms and conditions of storage management, require any new supplier to redeem the stored gas to its predecessor in unfavourable market conditions, in particular when the release of capacity, pursuant to Article 30-2 of the Law of 3 January 2003, comes at the beginning of winter.
No provision of the Act of 3 January 2003 referred to above imposes on the supplier receiving new storage capacity, pursuant to the second paragraph of Article 30-2 of the Act, the purchase of the stored gas to the supplier's predecessor. However, the modalities for the transfer of gas in the capacity are indivisible from their conditions of release.
Indeed, when a customer changes a supplier at the beginning of winter, it is necessary, for the new supplier that acquires the corresponding capacity, to dispose of gas, and, for the former supplier that releases it, not to be in excess stock.
Under these conditions, and as long as underground storage of natural gas is an essential means to ensure the continuity of the supply of customers, operators operating these storage facilities must, in order to give an effective effect to the provisions of Article 30-2 of the Act of 3 January 2003, guarantee to all users the transfer of the gas stored in transparent, non-discriminatory and economically relevant conditions.
Storage facilities operators must therefore adapt the terms of their contracts and access protocols to that end and make them public.
The terms and conditions for the release of capacity by the former supplier, and then their assignment to the new supplier by the storage operator, must therefore be specified, in particular, the rules for calculating the amount of gas that may be contained in the capacities and conditions to which the storage facility operator takes this gas to the former supplier and then assigns it to the new supplier.
The conditions of these transactions must also be explained. Thus, the assigned capacity filling rate must meet the needs of the new supplier and meet the technical constraints related to the respiration of storage. The acquisition price of the gas must reflect the cost of the stock, assuming that the gas would have been purchased every day at a market reference price to be injected by respecting a theoretical injection profile, and that it would have been stored at the cost displayed by Gaz de France.
It is therefore necessary for the Energy Regulatory Commission to invite Gaz de France to complete the general conditions of its contracts and access protocols in accordance with the principles set out above and to make them public.
On the conclusions of Altergaz company that the Energy Control Board determine the conditions for the disposal of the gas overabundantly stored for the event that it does not achieve its customer objectives:
To the extent that it is not entitled to the Altergaz company's request for the allocation of capabilities that it considers necessary to achieve its customer forecasts, the demand that the Energy Control Board determine the conditions for the disposal of the gas overabundantly stored in the event of unsuccessful objectives, is without object. So she can only be rejected,
Decides:
Altergaz's requests that the Energy Control Board recognize the ability to subscribe, as of April 1, 2006, to the storage capacity it considers necessary to achieve its customer objectives, and to establish the conditions for the disposal of the gas overabundantly stored in the event of unmet objectives are rejected.
Gaz de France will complete the general terms and conditions of its contracts and protocols for access to natural gas storage, within fifteen days of notification of this decision, by clauses, that it will make public, guaranteeing to all users the transfer of the stored gas, in transparent, non-discriminatory conditions and at a price reflecting a cost of establishing the stock established in accordance with the principles set out in the reasons.
Gaz de France will communicate to the Energy Regulation Commission, within the time limit prescribed in Article 2, the information that will attest to the successful execution of this decision.
This decision will be notified to Altergaz and Gaz de France; will be published in the Official Journal of the French Republic.
Done in Paris, March 8, 2006.
For the Energy Control Board:
The president,
J. Syrota
